Since the Treasury Laws Amendment (Electric Car Discount) Bill 2022 has been passed on 12 December 2022, it is important to know the additional incentives or benefits related to owing an electric vehicle and the Fringe Benefits Tax (FBT) exemption especially for fully electric vehicles.

Here are the key points:

FBT Exemption for Electric Vehicles:

As of 2023, fully electric vehicles in Australia are eligible for an exemption from the Fringe Benefits Tax. This exemption is part of the government’s initiative to encourage the adoption of environmentally friendly vehicles.

The FBT exemption applies to eligible electric vehicles that are provided as a benefit to employees. This can include company cars used for private purposes.

Criteria for Eligibility:

To qualify for the FBT exemption, the electric vehicle must be fully electric or plug-in hybrids. Hybrids or plug-in hybrids are not eligible under this specific exemption.

There may be a price cap on the value of the electric vehicles that are eligible for this exemption. It’s important to check the most current regulations for any updates regarding this cap.

Benefits for Businesses and Individuals:

Businesses benefit from the FBT exemption as it reduces the overall tax liability, making it more financially viable to provide electric vehicles to employees.

Employees benefit as well, as the use of a fully electric vehicle as a part of their remuneration package becomes more attractive due to the absence of FBT.

Additional Incentives and Benefits:

Government Rebates: Some states in Australia offer rebates or incentives for purchasing electric vehicles. These rebates can significantly reduce the upfront cost of acquiring an electric vehicle.

Reduced Running Costs: Electric vehicles typically have lower running costs compared to traditional internal combustion engine vehicles. This includes savings on fuel and maintenance.

Infrastructure Support: The Australian government is investing in electric vehicle charging infrastructure, making it more convenient to own and operate an electric vehicle.

Environmental Impact: Electric vehicles contribute to reducing greenhouse gas emissions, aligning with environmental sustainability goals.

Here is a summary specific conditions to consider:

The vehicle must be a zero or low-emissions vehicle.

The vehicle must be both held and used for the first time, on or after 1 July

2022.

The vehicle is used by a current employee or their associates.

Luxury Car Tax (LCT) must never have been paid or is payable on the importation or sale of the vehicle to be eligible for the FBT exemption.